Wednesday, April 25, 2012

Over the last year, the concept of multi-generational
housing has been steadily gaining attention from the mainstream press, many of
whom have been focused on the NextGen line of new homes offered by Lennar.

In the last few months alone, I've been asked to weigh in on this
subject by FoxNews, the L.A. Times and American Public Media's Marketplace, so I
thought this was a timely subject to address here.

Lennar’s NextGen homes offer a ‘home within
a home,’ offering its own private living quarters suitable for everyone from
visiting in-laws or unemployed family members to unrelated tenants helping
chipping in for the mortgage payment. And yet Lennar is far from the only builder offering this concept, as
variations from builders including Taylor Morrison, The New Home Company and
even affordable housing providers such as Bridge Housing and Jamboree Housing
Corp. have been built.

Although once quite common, the trend of living with
relatives declined with the rise of the suburbs, but is now staging a comeback
due to economic conditions. For example,
the share of multi-generational households approached 25% in 1940 before
steadily dropping to just 12.1% by 1980.
By 2010, however, that share had rebounded back to 18.3%, and, according
to a study by the Pew Research Center, is far higher for minority communities
in which family elders are readily welcomed as active members of the
household.

In 2009, 25.8% of Asian households,
23.7% of black households and 23.4% of Hispanic households included multiple
generations versus just 13.1% for white households. It’s also much more common for foreign-born
households (24.6%) versus those born in the U.S. (15.6%). The highest percentage of these households by
age group included those 85 and older (21.5%), 25 to 34 (21.1%) and 55 to 64
(20.9%), which would point to the elderly as well as recent retirees and
boomerang children.

According to Adrian Foley, President of Brookfield Homes’
Southland Division, although they are also addressing the multi-generational
trend, the overall demand for such homes may be limited. “I think that it’s not a passing fad because
statistics don’t lie, but I don’t think it’s for everybody and won’t be a
paradigm shift for the industry,” he offers.
“We might have some pent-up demand that will level out and then get back
to normal demand.”

For Brookfield, although most of their move-up homes have
long included areas for visiting in-laws, it’s only been recently that their
plans include separate sections which can be locked off and include their own
entrances. Their interior designers then
model it as a combination of alternative uses that can be adjusted as a
resident’s life journey changes.

“We’re big on efficiency competing with the resale
market: maintenance and cost of
household ownership is one big area on which we can compete versus the resale
market,” concludes Foley. “We’ve focused
on both the entry-level and move-down buyers, so we’re trying to come up with
attached housing that meets the needs for both ends of that barbell.” Much of that philosophy includes providing
accessibility, locations close to activities which aren’t funded by HOA dues,
and a cost that’s affordable.

There is, however, some potential confusion about Lennar’s
NextGen new brand of homes. That’s
because there’s also the NextGen Home Experience produced by Washington-based
iShowMedia. For over a decade, iShow has
been showcasing emerging trends, products and services for the American home at
trade shows such as IBS and CES, online, NextGenTV and in traditional media. With over 25,000 plans, the company is now
beginning to leverage their brand name and license their name to various
builders through a pilot program now underway.
Most of these partners would build single-family communities instead of
condominiums or apartments.

Adds company president Paul Barnett, “People are going to
live in their homes longer and that’s why we got into this flexibility. Aging in place, universal design works for
everybody. Not that the whole house needs to be that way, but part of it
should.”

Want to know more about this trend and how to address it in your projects? Contact us at MetroIntelligence for details!